By Lina Miranda, Senior Account Strategist
With the holiday season in full swing and a record number of consumers hitting stores with smartphones in hand, “showrooming”—the act of consumers price-checking on mobile phones while in store—is becoming a hot topic yet again…
New research reveals concerning facts about showrooming:
Showrooming is not dead. Though some retailers may have heralded the death of showrooming last year, recent reports have confirmed that showrooming is not only alive and well, but a significant and growing threat:
- Up to 69% of U.S. smartphone-owners actively use their device to shop the competition while in a retail store. ii
- 41% of customers who price-check on their phones while in store end up purchasing at a different retailer.[i]
- Younger shoppers—especially Gen Y/Millennials (aged 26-34)—are most likely to showroom and showroom more frequently. i
Showrooming is not just a “commodity category problem”. Retailers have commonly believed that only commodity categories—such as books, pet supplies, and consumer electronics—are vulnerable to lost sales from showrooming. However, the 2014 Forrester Technographics® survey found showrooming to be most prominent in sporting goods, specialty apparel, and luxury department store retail categories—meaning consumers are comfortable purchasing a “close-enough” alternative if the price is right.
Showrooming is not limited to high-ticket items. Even moderately priced inventory is not safe. According to a recent CFI Group study, consumers are equally likely to showroom for all products valued over $25—regardless of price point.[ii]
So what’s a retailer to do?
First, retailers should accept the fact that showrooming is here to stay, and take steps today to modify their long-term marketing strategy. This means:
- Eliminate channel conflict. Showrooming behavior is not driven solely by consumers’ quest for lower prices. Missing stock, MIA or poorly trained store associates, and long checkout lines also encourage customers to search online—where they may find alternative retailers or products. Retailers must strive to remove all points of channel conflict. Though this has broad implications (e.g., pricing strategy, inventory management, organizational structure, customer intelligence, sales team incentivization, etc.) and is no simple task, a truly customer centric strategy requires removing artificial barriers to purchase.
- Embrace the “mobile mind shift.” Build strategies around context by considering customer attitudes and preferences in the moment. Leverage mobile to improve the customer experience.
- Evaluate “showrooming metrics.” Incorporate showrooming metrics (e.g., web analytics reporting tracking the volume of visitors viewing price content via mobile devices within relevant geos) into your analytics program.
Second, retailers can mitigate the risk of lost revenue this holiday season by considering showrooming behavior in their digital media strategy. Here are 5 actionable digital media tactics for retailers to try today:
- Test targeting “showroomers” via paid search & mobile contextual display.
- Test partnering with coupon & deal sites. Test mobile display media on coupon & deal sites.
- Where possible, test mobile targeting for your store locations as well as competitors’ locations. Use tailored creative.
- Consider showrooming implications when evaluating your attribution methodology & model.
- Adjust your programmatic strategy to address showrooming behavior. Work with a DSP that incorporates both location & device attributes in their optimization algorithms—and ensure you’re passing all relevant mobile conversion data signals.
Showrooming is a consumer behavior that isn’t going away any time soon. But by fully embracing a customer-centric strategy and considering context during digital media planning, retailers can combat showrooming this holiday season and beyond.
Has showrooming impacted your holiday sales? What strategies do you use to combat showrooming?
Showrooming image from Forbes.
[i] Source: Forrester, North American Consumer Technographics® Retail Survey, 2014
[ii] Source: CFI Group, 2014 Holiday Retail Spending Report, October 2014